Law: Chapter 6

Promises as Acceptance

Most offers can be accepted by giving a promise instead of perform ing the contracted-for act.

Counteroffer

A change the offeree makes to the offeror's terms.

A contractual proposal in writing, signed by a merchant,and stating how long it is to stay open

Firm offer

Acceptance

Occurs when a party to whom an offer has been made agrees to the proposal.

Describe three ways genuine assent may be missing from an offer or assent.

(1) One party may be deceiving another (2) There may be an important error in the offer or assent (3) There may be unfair pressure exerted to obtain either the offer or the acceptance.

What are the requirements of an offer?

(1) The offeror must appear to intend to create a legal obligation (2) The offer must be communicated to the offeree (3) The terms must be definite and complete.

Binding agreement formed by a mutual exchange of legally binding promises

Bilateral Contract

Agreement between two parties that creates an obligation

Conract

Response by offeree, with new terms, which ends the original offer

Counteroffer

Counteroffer

Generally an offeree accepting an offer must ac cept it exactly as made. If the offeree changes the offeror's terms in important ways and sends it back to the offeror, a counteroffer results.

Party to whom an offer is made

Offeree

Proper From

Some agreements must be placed in writing to be fully enforceable in court.

Offeree

The party to whom an offer is made.

Offeror

The party who communicates a serious, definite offer.

Revocation

The right to withdraw an offer before it is accepted.

Mirror Image Rule

The rule that the terms in the acceptance must exactly match the terms contained in the offer.

What Elements Do All Offers Need to Have?

1. A proper legal description of the real estate 2. Price 3. Full terms for payment 4. Date for delivery of possession 5. Date for delivery of the deed

Acceptance Must Be Communicated to the Offeror

1. Silence as Acceptance 2. Promises as Acceptance 3. Performance as Acceptance 4. Modes of Contractual Communication 5. When Acceptances Are Effective

Acceptance

1. come from the person or persons to whom the offer was made 2. match the terms in the offer 3. be communicated to the offeror

Option

A binding contract in which the offeree gives the offeror something of value in return for a promise to keep the offer open.

Firm Offer

A contractual proposal in writing by a merchant stating how long the offer is to stay open.

Firm Offers

A special rule that works the same result as an option applies to merchants (indi viduals who regularly deal in the goods being bought or sold) who make offers in writing. If such a written offer contains a term stating how long it is to stay open, it is called a firm offer

When does acceptance occur and under what terms is it enforceable?

Acceptance occurs when a party to whom an offer has been made agrees to the proposal. In creating an enforceable contract, the acceptance must (1) come from the person or persons to whom the offer was made,(2) match the terms in the offer, and (3) be communicated to the offeror.

Revocation by the Offeror

After an offer has been made, the offeror can generally revoke it anytime before it is accepted by the offeree.

Contracts

Agreements between two or more parties that create obligations.

What are the requirements of an effective acceptance?

An effective acceptance must be made by the person or persons to whom the offer was made, match the terms in the offer, and be communicated to the offeror.

Why is it prudent to state a time available for acceptance when making an offer?

An offer is alive for a reasonable length of time after it is offered. However, either the offeror or offeree may misunderstand what a reasonable length of time is. Therefore, to avoid misunderstandings, the time available for acceptance should be specified at the outset.

Only Offerees May Accept

An offer made to one person cannot be accepted by another. Sometimes, however, an offer is made to a particular group or to the public and not to an indi vidual.

Explain how the parties can create offers that cannot be ended by the offeror.

An offeree may give the offeror something of value in return for a promise to keep the offer open; if this option is accepted by the offeror, the offeror cannot withdraw the offer during the stated period of the option. A firm offer in a signed writing specifying how long the offer is to stay open will also prevent the offeror from withdrawing the offer before the specific time.

Describe how an offeror can end an offer.

An offeror can end an offer by revoking it before it has been accepted or by stating how and when the offer must be accepted.

At what point in time is an acceptance effective?

An oral acceptance is effective at the moment the words are spoken directly to the offeror. Other acceptances are generally effective at the moment they are sent, if they are sent properly and the offer has not specified a different means of acceptance.

Express Contract

Contract in which all the terms are expressly stated orally or in writing.

Unilateral Contract

Contract in which offeror promises something in return for offeree's performance and indicates that this performance is the way acceptance is to be made.

Implied-In-Fact Contract

Contract that does not have its terms expressly stated but they can be inferred from the parties' acts or conduct.

Executed Contract

Contract that has been fully performed. Both parties have done all they promised to do.

Executory Eontract

Contract that has not been fully performed. Something agreed upon remains to be done by one or both of the parties.

Bilateral Contract

Contract that is formed by a mutual exchange of legally binding promises.

Death or Insanity of Either the Offeror or Offeree

Contracts are agreements voluntarily entered into by the parties and subject to their control. Death or insanity eliminates such control.

What are some of the ways acceptances can be communicated?

Contractual communications can be conveyed by a variety of means, including telephone, fax, e-mail, face-to-face negotiations, ground mail, and hand signals.

Modes of Contractual Communication

Contractual communications such as offers, acceptances, rejections, revocations, and counteroffers may generally be communicated in person or by other effective means.

Destruction of the Specific Subject Matter

If the offer refers to unique subject matter, such as Melissa's card collection, and it is subsequently destroyed, for example in a fire, the offer is automatically terminated.

Options

If the offeree gives the offeror something of value in return for a promise to keep the offer open, this agreement is itself a binding contract. It is called an ____.

Social Agreements

If two friends agree to go to the movies, no contract is intended. The friends don't think of this agreement as creating legal obligations. If either breaks the date, the other may be offended but cannot file suit for breach of

Requirement that the terms in an acceptance exactly match the terms in the offer

Mirror Image Rule

Offer

Proposal by offeror to do something, provided the offeree does something in return.

Offeror's withdrawal of an offer before it is accepted

Revocation

The Acceptance Must Match the Offer

The mirror image rule requires that the acceptance must exactly match the terms contained in the offer. This is true even as to when and how the acceptance must be made. If the attempted acceptance is not identical to the offer, it is a counteroffer.

Offer and Acceptance

There must be an agreement composed of an offer and an acceptance upon which to base the contract. The person who malzes the offer is termed the offeror.The person to whom it is made is the offeree. The terms of the offer must be definite and accepted without change by the party to whom it was intended to be offered.

How can an offeree make certain his or her offer is kept open with the offeror?

To be certain his or her offer is kept open an offeree may give the offeror something of value in return for a promise to keep the offer open.This agreement is a binding contract called an option.

Capacity

To have a completely enforceable agreement, the parties must have the legal ability to contract for themselves. Age of the parties is one aspect of capacity. In most states, parties to a contract must be 18 in order to form a legally binding contract.

Affirmative response necessary to transform an offer into a contract

Unilateral Contract

Reasonable Length ofTime

When nothing is said in the offer about how long it will remain open, it will end after a reasonable length of time.

When Acceptances Are Effective

When the communication takes time, for example when sent through the surface mail, the question of when the communication is effective can become very important.

What are the elements required to form a contract?

(1) There must be a serious, definite offer and the party to whom it was communicated must accept the offer. (2) There must be genuine assent. (3) What the parties agree to must be legal. (4) Both sides must receive something of legal value. (5) The parties must have the capacity to contract for themselves. (6) Some agreements must be in writing (Proper Form)

The person who makes the offer

Offeror

How Can Offers Be Ended?

A. Revocation by the Offeror B. Time Stated in the Offer C. Reasonable Length of Time D. Rejection by the Offeree E. Counteroffer F. Death or Insanity of Either the Offeror or Offeree G. Destruction of the Specific Subject Matter

Time Stated in the Offer

In making an offer, the offeror may state how and when the offer must be accepted.

Performance as Acceptance

In some offers, the offeror requires that the offeree indicate acceptance by performing an action specified in the offer.

Preliminary Negotiations

Information often is communicated merely to induce someone to initiate bargaining. Such statements are not seen by the law as indicating an intent to contract.

Implied-At-Law (Quasi) Contract

Not really a contract but a fiction created by the law to allow the enforcement of a contractual remedy where justice alone warrants such a remedy.

Silence as Acceptance

One is not obligated to reply to offers made by others. An offeror's at tempt to word the offer so that silence would appear to be an acceptance will not work.

Contract to leave an offer open for a period of time in exchange for other consideration

Option

Jests

The law is nor concerned with what is actually in the mind of a person making what might be considered an offer. Rather, it is concerned with the appearance of chis action. [f you think you are joking, bur a reasonable person would interpret your conduct as indicating that you intend co con tract, you have made an offer. On the other hand if you are serious, but a reasonable person would interpret your conduct as a joke, then no legally enforceable offer is made.

Legality

What the parties agree to must be legal. An agreement to commit a crime or tort cannot be a legally enforceable contract

Consideration

What the promisor demands and generally must receive in order to make his or her promise legally enforceable against him or her is termed consideration.

Consideration

What the promisor demands and generally must receive in order to make his or her promise legally enforceable against him or her.

Rejection by the Offeree

When an offeree dearly rejects the offer, the offer is terminated. Unless renewed by the original offeror, the offeree can no longer accept the original offer.

Statements Made in Anger or Terror

Yelling after someone who has just stolen your watch, "Stop thief--I'll pay anyone who stops her $100," is not looked upon as being a valid offer by the law. It does not have the reasoned basis necessary for enforceable offers. So if someone ran after the person, captured her, and returned your watch, you would not, in a legal sense at least, owe the $100.